Senegal is located in the western most part of Africa’s Sahel region and has a national territory that spans 196,722 km². Its population is estimated at 14.3 million, 40.3% of which live in urban zones according the latest 2013 population census.
Senegal is one of the most stable countries in Africa, and has considerably strengthened its democratic institutions since its independence from France in 1960. Senegal has had three peaceful political transitions with four presidents: Leopold Sedar Senghor (1960-1980), Abdou Diouf (1981- 2000), Abdoulaye Wade (2000- 2012), and since March 2012, Macky Sall.
On March 20th, 2016, Senegal held a referendum to vote on changes to its constitution. The proposed changes aimed at strengthening the political system by reducing the length of the presidential term from seven to five years, creating a new consultative assembly, allowing an independent candidate status for all elections, establishing an official status for the opposition leader, and establishing the intangibility of some articles of the constitution (Republican form of the State, mode of elections, term of the presidential mandate, consecutive number of mandates). The “yes” vote won the referendum and passed the changes. The next presidential election is expected in 2019.
Over the course of 2015, Senegal’s macroeconomic performance has been strong with a growth rate of 6.5%, a rate which hasn’t been achieved since 2003. This performance is remarkable given the the depressed global environment that has contributed to many African countries registering a marked slowdown in their economic activities. As a result, Senegal was the second fastest growing economy in West Africa, behind Côte d’Ivoire.
The main drivers of growth were higher private sector demand, stimulated by lower energy and transport prices, as well as the ambitious public investment program carried out by the government, up by almost 0.4% of GDP in 2015. At the sectorial level, services remained the engine of growth, contributing to over one third of the economic expansion, while the industry’s contribution increased to approximately 23% thanks to a solid performance in the chemical industry and construction sector. The agricultural sector accounted for almost 34% of GDP growth in 2015 thanks to good rainfall and various targeted government programs in favor of rice production and horticulture value chains.
The economic outlook remains favorable in the short term with growth projected to reach 6.5% in 2016, with the economy driven mainly by the services sector, particularly telecommunications and financial services. The rebound in agriculture coupled with the end of the Ebola epidemic will benefit the national economy. Economic activity will be further strengthened by lower oil prices, reduced production costs, and electricity subsidies.
The uncertainty created by a slower implementation of reforms geared toward curbing unproductive public consumption, and delays in raising expenditure efficiency could hamper implementation of the government’s strategy for an emerging Senegal, known as the “Plan Senegal Emergent” (PSE). Sluggish policy implementation in the energy and agriculture sectors could also depress growth and the limited absorption capacity regarding the precautionary reserve of investment projects might slow down growth in 2016 and beyond.
An unfavorable investment climate, costly energy, and weak governance systems have prevented the private sector from stimulating the economy. External shocks and natural disasters have also slowed growth and increased the vulnerability of the entire economy.
In addition, poor management of exports such as peanuts, seafood, and phosphates have slowed growth. The tourism sector, which has substantial potential, has been neglected. In order to strengthen the Senegalese economy and increase its resilience to internal and external shocks, more efforts are needed to diversify the economy in the areas of horticulture, mining, telecommunications, and manufacturing.
The new government has developed an ambitious program that prioritizes diversification and exports. The Emerging Senegal Plan or “Plan Senegal Emergent” (PSE) aims to increase the productivity of Senegal’s economy in the public and private sectors. However, current plans to accelerate public investment will test the authorities’ ability to improve the quality of projects, and could lead to higher debt without commensurate positive impact on GDP.
Poverty remains high in Senegal, affecting 46.7% of the population. GDP growth is well below the rates necessary for significant poverty reduction, and a growing reliance on capital-intensive exports rather than labor-intensive sectors limits the creation of new jobs. Repeated shocks in recent years have further hampered progress, with poverty incidence decreasing only by 1.8 percentage points between 2006 and 2011, and the number of poor actually increasing to reach 6.3 million in 2011.
Inequality in Senegal is moderate, and slightly lower than the Sub-Saharan African average. However, geographic disparities are very pronounced, with almost 2 out of 3 residents poor in rural areas, especially in the south, versus one in four in Dakar. Progress has been made on access to education, but a significant number of youth only go to Koranic schools that are not aligned with the public school curriculum. Child begging related to some of these schools remains a problem, notably in Dakar.
To promote the welfare and human capital of the poorest, President Sall has committed to accelerating the roll out of the National Family Security Transfer Program (Programme National de Bourses de Sécurité Familial).
Last Updated: Apr 21, 2016